How To File Bankruptcy for Free: A 10-Step Guide

Collect Your Documents To Assess Your Finances & Debts

If you're scared to take a deep look at your finances, remind yourself that this is the first step on the path to a fresh start. Your bankruptcy discharge will probably happen sooner than you think! Also, gathering your financial documents and getting organized for your bankruptcy filing can bring some order to what feels chaotic and out of control.

Start by getting a free copy of your credit report. You're allowed to get one free report every week from each major credit bureau (Equifax, Experian, and TransUnion). Your credit report is a great place to start understanding your current debts. It details your credit history and accounts including credit cards, lines of credit, home loans, car loans, student loans, and some personal loans.

But be advised: Some debts won't be listed on your credit report. Common examples include medical bills, some personal loans, payday loans, and tax debts. Make a list of all debts not on your credit report so you don’t have to look for the information when you’re filling out your bankruptcy forms. 

Next, gather these documents:

• Tax returns for the past two years

• Pay stubs or other proof of your income for the last six months

• Recent bank account statements

• Recent retirement account or brokerage account statements

• Valuations or appraisals of any real estate (home, property, land) you own

• Copies of vehicle registration

• Any other documents relating to your assets, debts, or income

You'll need a lot of this information to fill out your bankruptcy forms completely and accurately.

Take the Required Credit Counseling Course From an Approved Provider

All bankruptcy filers have to take a credit counseling course from an approved provider. You must take the course in the six months before you file your bankruptcy petition (which opens your case) with the Bankruptcy Court. The course has to be taken through a credit counseling agency that's approved by the Department of Justice.

This course will help you decide if bankruptcy or another type of debt relief program is best for your current situation.

The course takes about one hour and can be completed online or by telephone. The course fee ranges from $10 to $50, depending on the provider. If your household income is under 150% of the federal poverty line, you can ask for a course fee waiver.

When you finish the course, you will receive a certificate of completion. It's important to keep this certificate. Bankruptcy law requires you to provide a copy of this certificate to the court when you file your bankruptcy forms. A credit counseling course is required in both Chapter 7 and Chapter 13 cases.

Complete the Required Bankruptcy Forms

Filing bankruptcy comes with a lot of paperwork. There are more than 20 required forms, and since some forms are several pages long, your total bankruptcy petition may be up to 70 pages.

The bankruptcy forms ask you about everything you make, spend, own, and owe. That is your income, expenses, assets, and debts. This will help the trustee and bankruptcy judge for your case understand your financial circumstances and whether you're eligible to file for bankruptcy. You'll also include information about your case, such as the chapter of bankruptcy you're filing and whether you're filing pro se (on your own) or with the help of a lawyer.

If you hire a lawyer, they will complete the forms for you based on the information you submit to their office. If you can't afford to hire a lawyer but don't feel comfortable completing the forms on your own, see if you're eligible to use Upsolve's free filing app or schedule an appointment with a legal aid provider in your area.

Get Your Filing Fee

There is a $338 filing fee for Chapter 7 bankruptcy, which is usually due when you file your bankruptcy petition with the court. 

If you don’t have the funds to pay the filing fee now, you apply to pay your fee in installments, after your case has been filed. You can ask to make up to four monthly payments. 

If you can't afford to pay even in installments, you can apply for a fee waiver. To qualify, your total household income must be under 150% of the federal poverty line. The court will decide if you qualify for the fee waiver. This happens after your bankruptcy petition. If the court denies your fee waiver application, it will typically order you to pay the fee in installments.

Print and Double-Check Your Bankruptcy Forms

Once you have prepared your bankruptcy forms, you will need to print them out for the court. You must print them single-sided. The court won’t accept double-sided pages. You will also need to sign the forms once they are printed.

You will need:

• The petition forms including any required local forms

• Your credit counseling certificate

• Your paycheck stubs

• Your application for a fee waiver or installment plan (if applicable)

Most bankruptcy courts require just one signed original of the petition, but some courts require additional copies. So, before you head out to submit your forms, call your local bankruptcy court to find out how many copies you will need to bring and to confirm you have all the required local forms.

Go To Your Local Bankruptcy Court To File Your Forms

Once you enter the doors of your local courthouse, you will be greeted by security guards, who will ask you to pass through a metal detector. Once you pass security, you will go to the clerk’s office and tell the clerk that you’re there to file for bankruptcy. They will take your bankruptcy forms and your filing fee (or application for a waiver or to pay the fee in installments). 

Do not submit your bank statements or tax returns to the court. These documents go to the trustee after the case is filed. Check out Step 7 below for more info on that.

While you wait, the clerk will process your case by scanning your forms and uploading them to the court’s online filing system. This usually takes no more than 15 minutes. 

Once done, the clerk will call you back to the front desk and give you:

• Your bankruptcy case number

• The name of your bankruptcy trustee

• The date, time, and location of your meeting with your trustee (this is called the meeting of creditors or 341 meeting)

At this point, your case has been filed! Congrats! The automatic stay now protects you from all debt collectors. This should bring tremendous relief, but you're not done yet. Continue on with the next steps.

Mail Documents to Your Trustee

The Chapter 7 trustee is an official appointed by the court to oversee your case and liquidate, or sell, nonexempt property for the benefit of your creditors. (Note that most bankruptcy filers keep all of their property because it's covered by exemptions.) Both Chapter 7 and Chapter 13 cases have a trustee.  

Pay attention to mail you receive from the trustee after filing your case. The trustee will send you a letter asking you to mail them certain financial documents, like tax returns, pay stubs, and bank statements. If you don’t send the trustee the requested documents following the instructions provided in their letter, you may not get a discharge of your debts.

Take a Financial Management Course

After filing your bankruptcy forms, you will need to complete a Financial Management Course (also called a Debtor Education Course) from an approved credit counseling agency.

The debtor education course:

• Can be completed online or by phone

• Typically takes at least two hour

• Costs between $10 - $50, unless you’re eligible for a waiver. 

The course educates you about how to make smart financial decisions going forward. You’ll learn how to prepare a budget and avoid incurring debt with high interest rates. 

You’re not eligible to receive your bankruptcy discharge and obtain a fresh start if you don’t finish the course and file your certificate of completion from the credit counseling agency with the court. 

Attend Your 341 Meeting

Your 341 meeting, or meeting of creditors, will take place about a month after your bankruptcy case is filed. You’ll find the date, time, and location of your 341 meeting on the notice you’ll get from the court a few days after filing bankruptcy. Due to the COVID-19 pandemic, all 341 meetings are held either by video conference or via telephone until at least October. 

The main purpose of the 341 meeting is for the case trustee to verify your identity and ask you certain standard questions and most last only about 5 minutes. Your creditors are allowed to attend and ask you questions about your financial situation, but they almost never do. 

❗❗ You must bring your government-issued ID and social security card to the meeting. If you don’t bring an approved form of both, the trustee can’t verify your identity and the meeting cannot go forward. You should also bring a copy of your bankruptcy forms to the meeting, along with your last 60 days of pay stubs, your recent bank statements, and any other documents that your trustee has asked for. ❗❗ 

Deal With Your Car Loan

If you own a car that you still owe on, you’ll have to let the bank and the court know what you want to do with it one one of your bankruptcy forms. 

If you want to surrender the car to the lender and discharge the debt, you don’t have to do anything, and you can stop making your payments. The bank will either file request with the bankruptcy court asking permission to take the car or wait until your discharge is granted before picking it up. 

If you want to keep the car, you can either reaffirm the loan or redeem the car. If you’re reaffirming your loan, the bank will send you a reaffirmation agreement after your case is filed. You have to complete and sign the agreement and return it to the bank within 45 days from your 341 meeting. The bank files the signed agreement with the court for approval. 

To redeem the vehicle you have to file a motion with the court. If the court grants your motion, you can buy the car from the bank for its current value. This gets you out of having to pay the amount left on the loan, but payment has to be made in one lump sum.